Hong Kong TV Broadcaster Seeks Details on Unbidden Suitor

  • TVB gets unsolicited offer from TLG to buy 29.9% stake
  • Offer didn’t include information on financial support: TVB

Television Broadcasts Ltd., Hong Kong’s dominant free-to-air TV broadcaster, said it received an unsolicited offer for 29.9 percent of the company from TLG Movie & Entertainment Group and is gathering more information about the prospective buyer.

The broadcaster’s shares rose to the highest close in almost 11 months with trading volume quadruple the 3-month full-day average. A 29.9 percent stake would be valued at about HK$4 billion ($516 million) based on Thursday’s closing price.

Another change in top shareholders at TVB would come after Li Ruigang’s China Media Capital took a stake in 2015 through an investment group, and after co-founder, the late media mogul Run Run Shaw sold control to buyers including HTC Corp. Chairwoman Cher Wang in 2011. TVB said it needs to ensure any investor has resources to fulfill its six-year investment plan, while analysts estimates show the broadcaster will probably report a third annual decline in net profit for 2016 as more TV viewers turn to programming offered via internet.

Closely held TLG Movie didn’t provide information about its owners, source of funds or “proof of financial soundness,” according to the TVB filing. TLG shareholders are Wai Ho Choi Geoffrey and Dong Wei-tsun Kelvin, also its sole director, according to a filing. Wai is a non-executive director of TLG (HK) Holdings Ltd.

TVB said it will seek more information, “including in particular whether the possible purchaser has adequate financial resources” to fulfill the company’s six-year investment plan.

The offer is conditional on shareholders voting down a proposed share buyback TVB announced last month, TLG Movie said in a filing to the Hong Kong exchange Wednesday night. TVB said on Jan. 24 it planned to spend as much as HK$4.21 billion repurchasing as many as 138 million shares, an HK$30.5 offer price, 15 percent more than the previous close.

The proposed buyback would raise the combined stake of the biggest shareholders including China Media Capital, Chairman Charles Chan Kwok Keung and non-executive director Mona Fong to 43.66% from current 29.9%, TVB said in January.

A China Media Capital representative declined to comment. A call to TLG Movie’s office number in Beijing listed on its website showed the number is no longer in use.

TVB shares climbed 3.2 percent to HK$30.60, the highest closing price since March 14, 2016.

Shaw Brothers Hong Kong Ltd. is TVB’s largest shareholder with a 26 percent stake as of October 2016, according to data compiled by Bloomberg.

China Media Capital and its other investment vehicle CMC Holdings have about 50 billion yuan ($7.3 billion) of investments and funds combined, Li said last month in an interview at the World Economic Forum in Davos, Switzerland.

China Media Capital has stakes in Shaw Brothers Holdings Ltd., the studio behind many Bruce Lee and Jackie Chan movies. The company’s also known for acquiring Star China TV from Rupert Murdoch’s 21st Century Fox Inc., as well as for establishing joint ventures with some of the biggest Hollywood studios such as Dreamworks Animation LLC and Warner Bros.

— With assistance by Jing Yang De Morel, Dominic Lau, Prudence Ho, and Simon Lee

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